A new competition law was enacted on 1 July 2005, the Competition Act No. 44/2005 (hereinafter referred to as the “Competition Act 2005”), which replaces the current competition law from 1993. The main changes are of an administrative nature, with the merging of the Competition Authority and the Competition Council into a new entity called the Competition Authority. In addition the enforcement of rules on unfair trade practices has been divested to a new institution, the Consumer Agency. The merger control provision was not amended but is now numbered 17 instead of 18. An English version of the Competition Act 2005 is available on the Competition Authority's website, www.samkeppni.is.

The Competition Act 2005 was amended in April 2007. The amendments include adding a new provision concerning structural remedies and clear authority to impose fines when mergers are not notified correctly within the time limits. The English translation of the Competition Act 2005 available on the Competition Authority's website has not been updated to reflect these changes. It will eventually be updated, though at the time of writing a precise date for this was not known.

Icelandic merger rules are based on European Community (“EC”) merger rules. The Competition Authority's standard work method is therefore to seek guidance from EC and European practice when resolving specific issues and to follow a similar line unless some Icelandic rule or a specific local situation leads to a different conclusion.